Pepsi Turning Blue With New Flavoring To Lift Cola Sales

Published: May 8, 2002

PepsiCo, hoping for more of the sales generated by a cherry-red version of its Mountain Dew soda, will broaden the strategy by introducing a blue variation of its flagship soft drink this summer.

The company said yesterday that it would begin selling Pepsi Blue, a berry-flavored cola, in August, in a bid to reach more teenagers, the biggest consumers of carbonated drinks.

Pepsi announced its new drink as its rival, Coca-Cola, prepares to introduce a vanilla version of its namesake beverage next week. The moves show how both soft drink makers are working to revive sales of carbonated drinks, an enormous but largely static market.

''This could well be the answers that these companies have sought in returning their cola businesses to stronger growth,'' said John Sicher, publisher of Beverage Digest, an industry magazine. ''The carbonated soft drink market is over 10 times as big as the next largest category, bottled water, so achieving healthy growth in such a big category has a huge leverage effect.''

One of the few drinks to draw new consumers recently has been Mountain Dew Code Red, a cherry-flavored drink introduced by Pepsi last spring. It proved a quick success with teenagers. Both Code Red and Pepsi Blue have 16-year-old males as their target consumer.

This year, Pepsi said that it expected to sell about 100 million cases of Code Red, out of total Mountain Dew sales of 850 million cases. ''Code Red is a great success model for us to follow,'' said Dave Burwick, senior vice president of marketing for Pepsi-Cola North America.